Asia Pacific is at the forefront of the global population ageing phenomenon, it’s older populations expanding fast on the back of falling birth rates and rising life expectancy. By 2040, the region will be home to 757 million people aged 65 and over – accounting for more than half the world’s total older population.
Such a rapid expansion of the older demographic will change the labour market and impact consumption and economic growth in the region, highlighting the need for a gradual shift in socioeconomic policy and business focus towards older people.
While Japan will remain the world’s oldest country with the highest share of 65+ population by 2040, South Korea and Singapore will emerge in the list of the top five oldest countries, driven by decades of low fertility rates.
Japan’s median population age to surpass 50 years by 2024
With one in every three people in Japan aged 65+ in 2040, the country will continue to be home to the world oldest population. Japan will also be the first country in the world to see its median population age – which can be said to represent the average age – surpassing 50 in 2024. Along with rapidly ageing demography, Japan’s citizenry is declining, creating significant challenges, but also new opportunities, for the Japanese economy and society.
Thanks to growing incomes and the rising share of older consumers in the total population, expenditure by households headed by the over-60s in Japan is forecast to grow by 3.6% per year on average between 2020 and 2040 – faster than households headed by younger age groups.
In 2040, spending by Japanese households with a household head aged 60+ will reach a substantial USD2.2 trillion, offering good opportunities for businesses serving this important demographic.
South Korea’s population may decline earlier than expected
The share of the 65+ population in South Korea will jump from 15% of the total population in 2019 to 34% in 2040, making the country one of the most rapidly-ageing nations in the world. This has been driven by the country’s extremely low fertility rates, which stood at 0.9 children born per female in 2019 – the lowest rate in the world and well below the rate of 2.1 that is required to maintain a stable population.
As ageing hastens, a decline in South Korea’s population could set in earlier than expected, causing significant economic consequences in terms of productivity and growth.
One in every three Singaporeans will be aged 65 or over by 2040
People aged 65 and above will make up a third of the Singaporean population by 2040, a huge increase from 13% of the population in 2019. Singapore continues to have one of the highest life expectancies in the world, set to reach 85.8 years by 2040.
As Singapore’s shrinking working-age population will face challenges in supporting its ageing society, the city-state’s government has launched various initiatives, including investments in lifelong learning, in order to boost the human capital potential among its older population.
Ageing is a major demographic change that will affect every aspect of the economy and society. The older population is also most at risk from the current COVID-19 pandemic.
Since COVID-19 and its resulting economic recession are impacting birth rates and causing a slowdown in global immigration, the process of population ageing may accelerate in the coming years, particularly in advanced economies. Both governments and businesses will need to adapt now in order to be sufficiently prepared for the new demographic circumstances and reap the benefits of people living longer in the coming years.